Hong Kong stocks surged, an easily overlooked variety
Yesterday morning, I saw news about substantial progress in the Sino-US trade negotiations, so the market started rallying early. However, there were still some uncertainties because it wasn't clear how much the tariffs would actually be reduced. After the market closed, the official announcement came out, far exceeding market expectations—basically setting tariffs at 10%, a huge drop from the previous 145%.
After the news broke, the A-share market had already closed, but the Hong Kong market still had an hour of trading left. As a result, the Hang Seng Index surged, with the Hang Seng TECH Index closing nearly 6% higher.
Yesterday, the Hang Seng TECH Index (the largest by scale from Huaxia) outperformed the Hang Seng Stock Connect Internet Index (the largest by scale from Fullgoal), mainly due to strong gains in heavyweight stocks like XPeng, Li Auto, and Sunny Optical, which drove the Hang Seng TECH Index higher.
However, another index called the Hang Seng Stock Connect TECH Index (the largest by scale from Invesco Great Wall) didn't rise as much as the Hang Seng TECH Index, mainly because it includes some healthcare stocks. Yesterday, the Hang Seng Healthcare Index (the largest by scale from Bosera) was the worst performer in Hong Kong due to news about Trump pushing to lower drug prices in the US, similar to China's centralized procurement policy.
But another index that performed almost as well as the Hang Seng TECH Index, though many seemed to overlook it, was the Hang Seng Stock Connect Non-Bank Financial Index. This index is currently tracked exclusively by GF Fund, with no second fund following it yet. The high volatility of this index is due to its focus on Hong Kong insurance stocks, followed by Hong Kong brokerages. Brokerages are naturally the flag-bearers of a bull market, but insurance stocks are the second flag-bearers.
Moreover, the volatility of Hong Kong insurance stocks is greater than that of A-share insurance stocks. Intuitively, the volatility of Hong Kong insurance stocks might be comparable to that of A-share brokerages.
So for investors seeking high volatility in Hong Kong stocks, it makes sense to first allocate to indices like the Hang Seng TECH and Hang Seng Healthcare, then add some "catalyst" products like the Hang Seng Stock Connect Non-Bank Financial Index. These can shine with just a bit of positive news and offer investment logic that's somewhat uncorrelated with the Hang Seng TECH and Hang Seng Healthcare indices, helping to diversify risks.
(Not investment advice)
@社区小助手
$Huatai-PB CSOP Hang Seng Technology ETF(QDII)(513130.SH) $Dacheng Hang Seng Health Care ETF(QDII)(159303.SZ) $Fullgoal CSI HK Equities Internet ETF(159792.SZ) $GF Fund CSI HK Connect Financials(ex Banks) Thematic ETF(513750.SH)
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